Emission Schedule Decay
Emission Schedule Decay describes the programmed reduction in the rate at which new tokens are created and distributed to network participants. This mechanism is frequently used to ensure that a project transitions from a high-inflation growth phase to a more stable, mature economic state.
By gradually lowering emissions, the protocol aims to reduce sell pressure over time as the network becomes more established. This process is analogous to the halving events seen in proof-of-work blockchains.
It requires careful planning to ensure that security and participation remain incentivized even as rewards decrease. If decay happens too quickly, network security might suffer due to insufficient rewards for validators.
If it happens too slowly, inflation may permanently devalue the asset.